Question

Eneri Company's inventory records show the following data: Units Unit Cost Inventory, January 1 10,000 $9.20 Purchases: June 18 9,000 8.00 Nov. 8 6,000 7.00 A physical inventory on December 31 shows 4,000 units on hand. 25,000 units were available for sale. Eneri uses the periodic inventory method. Under the LIFO method, cost of goods sold is
a. $173,040.
b. $28,000.
c. $178,000.
d. $169,200.

Answer 1

Answer:

d. $169,200

Explanation:

Total units available for sales = Beginning units + Purchases = 10,000 + 9,000 + 6,000 = 25,000 units

Number of units sold = Total units available for sales - Ending units = 25,000 - 4,000 = 21.000 units

Using LIFO method, cost of good sold can be calculated as follows:

Cost of good sold = (6,000 × $7.00) + (9,000 + 8.00) + (6,000 × $9.20) = $42,000  + $72,000  + $55,200 = $169,200.

Therefore, the cost of goods sold under the LIFO method is $169,200.